INVESTING an art

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We often hear that millennials aren’t prudent investors or focused on savings, but the COVID-19 outbreak has left many of them worried about their financial situations, both in the short or long term. Our generation is focused on living our dreams with little or no future planning. The percentage of our income that’s saved every month has become lower and led us to face some financial challenges, especially now during this pandemic. 

The stock market is an avenue where investors trade in shares, bonds, and derivatives. This trading is facilitated by stock exchanges, which can be thought of as markets that connect buyers and sellers. The key to making money in the stock market is to learn how to properly value a company and its share price in the context of the Indian economy and the firm’s operating sector. 
 


Investing is a way to set aside money while you are busy with life and have that money work for you so that you can fully reap the rewards of your labour in the future. Investing in equities is one of the best ways to stay ahead of inflation in the long term. But the high returns carry their own set of risks. So, never jump into equity investing only for the greed of good returns. It is imperative for investors to understand the risks before making their debut in the stock market. If you believe you understand the dynamics of equity investing and have the required risk appetite. 


One of the most important things in personal finance is to channelize your savings towards investments. Now you may wonder what’s the difference between saving and investing as these two words are often used Interchangeably . Saving is setting aside money you don’t spend now for emergencies or for a future purchase. It’s money you want to be able to access quickly, with little or no risk. Investing, on the other hand, is buying assets such as stocks, bonds, mutual funds or real estate with the expectation that they will make money for you while you sleep. 

 
People invest based on trust. Banks and insurance companies enjoy greater trust due to the implicit backing of the government. Equities and mutual funds are volatile but reward long-term investing. Many people confuse trading and investment because of poor financial understanding. A large number of stocks and IPOs also confuse investors who don’t do enough research or have the maturity or time horizon to withstand volatility. Even in mutual funds, multiple schemes can be confusing. 
 
Lack of appropriate financial awareness makes retail investors buy in greed and sell in fear. In later part of this blog I will discuss how does stock market works. 

 
 

HAPPY INVESTING :-) 


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